I have been having a lot of tough conversations with clients lately and that has prompted me to write this post. I know it’s not light and fun but I do feel it is necessary.
Here are some reasons I have had to decline numerous clients this week alone:
- Collections. If you owe someone money, please pay them as soon as you can, preferably before they go to collections. So many people seem to hope that ignoring them will make them go away, let me be the one to tell you that just doesn’t work. If you can’t pay them, contact the collections agency or whoever the debt was originally owed to and see if you can settle or set up a payment plan.
- Missed payments. If you work away or have a habit of missing payments just because you forgot, please set yourself up with automatic minimum payments. Set up automatic payments on your cell phone bills, credit cards, anything that can be an automatic payment will eliminate the “oops’s” I see all the time.
- Debt. I am seeing more and more people who just can’t afford to buy a house. Sometimes it’s because they don’t have a high enough income but most of the time it is because of debt that they have. For example, large vehicle payments. If you don’t need a certain vehicle for work, please don’t buy an expensive vehicle as that vehicle could be the difference between buying and renting. I am also seeing a lot of very high credit card and line of credit balances. These are impacting credit scores because of high utilization (what lenders view as living beyond your means) and what you can afford as we have to use 3% of any balances on credit cards and lines of credit to qualify you.
Now I know the last few years have been difficult for many of us and some of what I am seeing is a result of that. But, what the last few years has taught me is it is time to go back to living within our means and only using credit for emergencies. It is time to go back to doing monthly budgets. It is time to start saving for a rainy day because now we know, a rainy day can happen anytime and last for a long time.
If you don’t know how to do a budget, reach out, there are many people who can help with this.
And finally, if buying a house is in your 1-2 year plan, reach out and let’s take a look to see if you need to work on anything to be ready to buy on your time frame. I am here to help!